How to spot a coming recession

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From the New York Times:

Last week’s report on second-quarter gross domestic product showed that the economy slowed last spring. It also came exactly 10 years since the Great Recession ended, making this officially the longest expansion in American history. (Well, probably. More on that in a second.) So perhaps it’s no surprise that forecasters, investors and ordinary people are increasingly asking when the next downturn will arrive.

Economists often say that “expansions don’t die of old age.” That is, recessions are like coin flips – just because you get heads five times in a row doesn’t mean your next flip is more likely to come up tails.

Still, another recession will come eventually. Fortunately, economic expansions, unlike coin-flip streaks, usually provide some hints about when they are nearing their end – if you know where to look. Below is a guide to some of the indicators that have historically done the best job of sounding the alarm.

Continue reading at the New York Times

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